New California Case Reinforces Duty Owed to Borrowers by Lenders/Servicers in Processing Loan Modifications
Too often, homeowners are faced with general incompetence in seeking a loan modification from their bank or mortgage servicer. This includes being provided misinformation, being provided different information from different employees, having documents not timely processed, having to resubmit documents that were lost or misplaced, among other things. However, this week a California case may make this process easier by holding banks and mortgage servicers accountable for their conduct in processing loan modifications.
On April 26, 2016, the California Court of Appeals (Sixth District) issued a decision that will help homeowners seeking to obtain a loan modification. The decision is Daniels v. Select Portfolio Servicing, Inc. and involved homeowners who were disgruntled in their efforts to obtain a modification. The Daniels alleged that their lender, Bank of America, made negligent and intentional misrepresentations during the loan modification process. The Daniels made other claims including that their lender and mortgage servicer were generally negligent during the loan modification process. The Court of Appeals held that the lower court should not have dismissed the Daniels’ lawsuit and that the Daniels had stated claims for intentional and negligent misrepresentation as well as for general negligence.
In making its decision, the Court of Appeals concluded that the bank owed a duty by applying a six factor test. The six factors included: 1) the extent to which the transaction was intended to affect the Daniels, (2) the foreseeability of harm to the Daniels, (3) the degree of certainty that the Daniels suffered injury, (4) the closeness of the connection between the bank’s conduct and the injury suffered, (5) the moral blame attached to the bank’s conduct, and (6) the policy of preventing future harm.
If you or a loved one has suffered harm due to the misconduct or negligence of a bank or mortgage servicer, contact the Piccuta Law Group today. Our attorneys have experience handling litigation against banks and mortgage servicing companies. Principal attorney, Charles Tony Piccuta, defended banks and mortgage servicers before representing borrowers and homeowners. As such, he has specialized skill and experience handling those claims. He is available to discuss your case today.